After decades of recognition and social prestige, the companies of the digital economy are starting to receive criticisms that are questioning their reputation.

Unfair labour policies, tax evasion, impacts on transport and housing, the improper use of people’s personal data… Actions such as those of the Facebook and Cambridge Analytica case are undermining their credibility, even though, for the time being, this has not caused irreparable losses. Greater corporate social responsibility and more awareness in the use of these services could force in-depth changes in the sector.

It is so evident, that it sounds like a cliché. Liberal democracy and the traditional institutions are facing a situation of crisis nearly the world over. This is confirmed by the Edelman Trust Barometer, which in its 2018 edition reveals that the citizens of 28 countries score the trust that they feel towards their institutions at 48 out of 100. The study by this US multinational includes evaluations of government, NGOs, the press and also businesses. However, a detailed look reveals that the results are ambivalent between categories, and technology companies enjoy the support of 75% of the population, above sectors such as education (70%) or healthcare (63%).

As has been repeatedly pointed out by researcher Evgeny Morozov – the “party pooper” of the technology sector, in the words of Brian Eno – digital economy companies are a “teflon industry”, because as happens with good frying pans, anything thrown at them slides away without sticking. However, there are some signs pointing towards a possible wearing down of their reputation, which can be tracked in recent news: the strike at Amazon Spain, the battle led by some municipal councils against Airbnb, the job precarity of delivery riders, demands for greater regulation, etc.

In addition to these symptoms of discontent shown towards some companies, there is fear regarding the general course being taken by innovation. According to the Edelman Barometer, people from all over the world are warily observing advances in artificial intelligence, self-driving vehicles and employment automation; as well as the treatment given by companies to personal data. Although that does not prevent people from maintaining a broad margin of sympathy, those responsible for the study warn that this may be lost extremely quickly, as declines in trust have been experienced among the “informed public” of as much as 20% in the USA and France, for example. All of this without even taking into account the possible effect of a recent scandal: the case of Facebook and Cambridge Analytica.

Data, lies and manipulation

“There was clearly a breach of consumer trust and a likely improper transfer of data”. These were the words used by US senator Chuck Grassley to address Mark Zuckerberg during his much-commented appearance before the United States Congress. Grassley was referring to the leak reported in March 2018 by The Guardian, which related how British consultancy company Cambridge Analytica had illicitly obtained the information of 50 million Facebook users in the United States. The company used it to produce psychological profiles which it then impacted with contents created specifically to influence their vote in favour of Donald Trump. Thus, and in one single revelation, the case brought together three of the fears that are currently all the rage: fake news, the manipulation of electoral processes and, of course, loss of privacy. Let’s take it one step at a time.

Fake news is not an Internet phenomenon. A large part of 20th-century propaganda is none other than the systematic use of media manipulation for political interests. However, the term has taken on greater relevance since the end of 2016, when Donald Trump and other world leaders introduced it into their discourses to contradict the critics and undermine the credibility of any unsympathetic press. What place does Facebook occupy in terms of fake news, if it is only a distribution platform? As already explained by Sandra Álvaro and Àlex Hinojo in this blog, on the current media scene, the difference between traditional journalistic outlets, social media networks and pro-party publications is increasingly blurred. In Spain alone, some 60% of people use the social media networks to stay informed, and 48% of them use Facebook for this in particular. This causes sources to get mixed up and it converts the social networks into media outlets with no journalistic filter and all news articles seem to be equally trustworthy; even more so when shared by family and friends.

Facebook has been accused explicitly of not doing enough to limit this confusion, since it could moderate false news or news designed to incite hatred, in the same way that it applies itself to censoring any trace of sexuality. One of the most criticised cases has been that of Myanmar, where the social media network has been accused of playing a key role in the propagation of hatred towards the Rohingya, an ethnic minority suffering a wave of violence that has forced some 700,000 people to flee their homes. This same lack of control is what would also have facilitated Russian interference in the US elections, since according to the country’s intelligence community, Russia orchestrated a campaign to influence people in favour of Trump through – among other things – the dissemination of fake news on the social media networks.

The privacy paradox

Added to the cocktail of fake news and electoral manipulation is the confirmation of a third fear: that the personal data on which a great part of the digital economy is based may be used for unknown or unshared purposes. This is a confirmation because the revelations of Edward Snowden in 2013 already highlighted the fact that information on users of Apple, Google, Facebook, Microsoft, Yahoo and YouTube had already been compiled in a massive way in the past, on that occasion by the US Government itself.

But beyond the waves of indignation that usually follow on from these revelations, neither Facebook nor other technology companies appear to be struggling, at least not due to this loss of reputation. It is necessary to reflect on why users do not stop using these platforms, even when they are opposed to many of their policies and practices. In the specific sphere of privacy, this phenomenon has been dubbed “the privacy paradox”, according to which, although citizens demand greater protection of their personal information, they continue using tools that make a living from harvesting it. The explanations for this contradiction are varied, but they point to the fact that people are prepared to consciously provide certain data if, thanks to this, they obtain other types of short-term benefit, not just in the form of goods and services but also access to knowledge, freedom of expression, social recognition, construction of interpersonal relations, etc.

2018 Edelman Trust Barometer | Edelman

2018 Edelman Trust Barometer | Edelman

A good example of this paradox is found in another Edelman survey, from 2016, on Trust and Predictive Technologies. With respect to banking, the majority of people indicated at that time that they would not approve of their data being used to establish patterns to automatically calculate who can access a mortgage and who cannot. However, they were willing for them to be used to improve the management of their accounts and the advice that they receive. Extrapolating these double standards to other spheres of the digital economy, it seems plausible that people may distrust some companies and even the course of innovation as a whole, but that does not mean that they want to renounce the benefits that they obtain from their consumption in the short term. Added to this is a certain tendency towards natural monopolies in the sector, as well as the network effect, the phenomenon by which the value of a product or service increases the greater the number of individuals using it. For all these reasons, abandoning platforms that group together the larger part of the consumers of a market implies, in practice, also assuming the cost of isolating oneself from their benefits, whether they be economic or social.

Changing the tendency

Bill Gates said that the majority of people overestimate what they can achieve in one year and underestimate what they are capable of doing in ten. Although the big technology companies seem to be immune to popular distrust, a tendency has probably begun that may force changes in the sector. Firstly, because the sovereignty of these companies now threatens that of states themselves, which are starting to lay down limits to them through legislation and taxes. In response, many of these organisations are starting up advertising campaigns and lobbies to maintain their profits, which means that citizens must measure how far they support or reject the proposals of legislators to change the situation. A good example of this is the dispute between Airbnb and Barcelona City Council which, beyond the controversy, may become an example of new forms of public-private cooperation to correct the undesired effects of this and other major corporations in more cities around the world.

Meanwhile, a conscious, critical and informed use of these services is the only way of forcing all the technology companies to take into account these demands. It must not be forgotten that trust between the parties is the basis of a large part of the collaborative economy business model and other innovations such as blockchain, therefore these companies should not feel comfortable in the face of an ongoing decline in their credibility. In the same way that a market exists for those organisations that highlight their social or environmental responsibility, technology companies that respect the sovereignty of user data, the working conditions of their staff, or that take into account their impact on the environment could also obtain economic returns. In the field of journalism, for example, the number of people paying for online media has increased in many countries and is now a significant strategy in Spain, where 11% of news consumers are paying in exchange for independent and quality information. In the same way, there is already talk of pay-for-privacy models as an opportunity for services that guarantee the protection of their users’ data. Companies such as AT&T, Comcast and Facebook itself have already tested these models or have shown their intention to do so in the future.

Cultivating trust is difficult. It is intangible corporate capital that is achieved with time and effort. The big technology companies have been responsible for social advances and improvements that today are taken for granted, but that have been the result of their continued drives in favour of innovation. Whether they are capable of maintaining their credibility will depend on where they direct their steps in the medium term and how demanding their users, who increasingly appear to judge technological advances by taking into account their social impact, will become.